An auditor is communicating with those charged with governance (the Audit Committee) of a nonissuer. The auditor has identified several significant deficiencies in internal control that are not material weaknesses. Which of the following statements regarding the required communication is CORRECT?

Answer options:

The communication must be in writing and should be made no later than 60 days following the report release date.

The communication may be oral or written, provided it is documented in the working papers.

The communication is only required if the significant deficiencies could result in a material misstatement.

The auditor must communicate these deficiencies before the audit report is issued.

How to approach this question

Recall AU-C 265 requirements: Written? Yes. Timing? By report release + 60 days.

Full Answer

A.The communication must be in writing and should be made no later than 60 days following the report release date.✓ Correct

AU-C 265 requires the auditor to communicate in writing to those charged with governance significant deficiencies and material weaknesses identified during the audit. The communication is required no later than 60 days following the report release date.

Common mistakes

Confusing the timing (before report vs. 60 days after) or the form (oral vs. written).

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